The FPO Full Form in Share Market stands for Follow-on Public Offer. It refers to a process where companies that are already listed on the stock exchange offer additional shares to the public. This is typically done to raise funds for various reasons such as business expansion, reducing debt, or providing liquidity to existing shareholders. Unlike an IPO (Initial Public Offering), which introduces a company to the stock market for the first time, an FPO is issued by companies that are already publicly traded.
Types of FPOs
There are two main types of FPOs:
- Dilutive FPO: In this type, the company issues new shares, increasing the total number of shares. As a result, the earnings per share (EPS) of the company may decrease since the profits are divided among a larger pool of shares.
- Non-Dilutive FPO: This involves selling shares that already exist and are held by current shareholders. No new shares are created, so the total number of shares remains the same, and the EPS is unaffected.
Factors Influencing FPO Success
The success of an FPO depends on various factors such as market conditions, the company’s performance, industry trends, and regulatory compliance. When the market is strong and the company shows good financial health, an FPO is more likely to be successful. In conclusion, the FPO Full Form in Share Market plays a vital role in enabling companies to raise additional capital for future growth.
